Publications

Pursuant to legislation recently enacted by the Colorado Legislature and signed by the governor, provisions in snow removal services contracts requiring indemnity for one’s own fault will no longer be enforceable, effective August 8, 2018.

In a recent case, the Colorado Supreme Court held that any concern was obviated that an insured facing an unreasonable delay of benefits would be in a “superior” position to a similar insured suffering an unreasonable denial of benefits or otherwise receive a windfall.

In a recent case, the Colorado Supreme Court observed that a statutory bad faith action can never result in a determination of overpayment or delinquency. Thus, the court found that if the bad faith statute is a penalty, the cause would never accrue under the statute − which the court deemed an impossible result because it would render the statute of limitations meaningless − and held that the bad faith statute is not a penalty, and therefore not subject to the one-year statute of limitations.

On May 14, 2018, the U.S. Supreme Court relied exclusively on principles of federalism to strike down the Professional and Amateur Sports Protection Act and open the door for all 50 states to legalize sports gambling − while analyzing what effect if any the case would have on the burgeoning cannabis industry and the related state regulatory landscape.

If Colorado enacts proposed new legislation, it would be among a handful of states with the shortest notification timeline in the country for data breach events. While the 30-day deadline provides consumers the opportunity to quickly respond to the improper release of sensitive information, it clearly shortens the period within which companies are required to react.

While Attorney General Jeff Sessions’s January 4, 2018, memo indicates that the federal government continues to maintain the belief that marijuana is an illegal substance, the extent to which federal law will be enforced in Colorado remains uncertain at this time.

While cyber policies were created to fill the insurance gap for data breach incidents, there are naturally limitations to such coverage. Therefore, the Fourth Circuit’s recent expansion of CGL coverage has the potential to cause overlap in coverage and unintended confusion when companies are insured under both CGL and cyber policies.

Today, approximately one third of all security breaches are directed at higher education. From personal and financial information to student health records to campus police departments that maintain records of interactions with students, such information is inherently sensitive and can, at the very least, lead to reputational damage if exposed. In addition, balancing the academic purpose of an institution with the need to protect certain information is a challenge that gets at the fundamental function of a university.

With extensive reporting on social media website Ashley Madison’s compromise of the names, addresses, credit card information and phone numbers of its 37 million members, the cheat facilitator has been cheated in what will likely amount to a very costly breach.

Businesses in 2015 have become enthralled by virtually unlimited access to customers and business partners via online platforms. Unfortunately, many have focused on the potential profits arising from such undertakings without sufficient consideration for the problems that too frequently arise.

A recent ruling by the Colorado Supreme Court addresses in the employment context the conflict between federal and state law that arises when states legalize medical and retail marijuana. Colorado’s Supreme Court issued what appears to be a per se determination that the use of medical marijuana is not a “lawful” activity protected by Colorado’s “lawful activities statute” because marijuana remains prohibited under federal law as a Schedule I substance. Therefore, it is not an unfair or discriminatory practice for an employer to discharge an employee based on the employee’s use of medical marijuana, even outside of the workplace.

A recent ruling by the California Supreme Court appears to continue a line of decisions regarding potential product contamination rendered at a critical time for a food industry facing an increasingly hostile regulatory environment. Food companies must analyze and understand the potential impact the new regulations will have on their operations and consider the expertise and coverages product contamination policies can provide when a crisis management event strikes.

A recent ruling by the Colorado Supreme Court represents a setback for the energy industry in its defense of fracking litigation in Colorado. Had they won, the industry could have used the decision to secure early dismissals of fracking suits. Now, as a consequence of this ruling, Colorado fracking defendants are likely to see an increase in defense costs, fewer dismissals and fewer early settlements.

Generally, a company’s duty to notify of a data breach is triggered when personally identifiable information is exposed or lost. It is the definition and scope of that information that leaves responsible parties scratching their heads and looking for answers.

Most Latin American countries have done little in the way of enacting laws to dissuade cybercrime either through governing and reporting requirements for those in possession of sensitive data or through more severe penalties for corresponding loss. Without the motivation to more closely monitor and protect sensitive data, business loss and the incentive for criminals to attack will continue to grow.

The Federal District Court in Wyoming has extended Wyoming Statute §30-1-131 to preclude coverage of a drilling company that claimed to be an additional insured covered for its own negligence under a liability policy issued to a wellsite management company. The case arose in the Tenth Circuit, which jurisdiction includes Nebraska, Colorado, Utah and Oklahoma, all locations central to the resurgence of drilling in the oil & gas industry. Thus, the decision may have wide-ranging implications for neighboring states with similar anti-indemnity laws.

While cyber espionage, crimeware, and other types of cyber attacks and theft are nothing new, even for Sony, the FBI’s determination that North Korea was behind the recent devastating attack raises critical alarms. The attack did not merely harm Sony Pictures Entertainment’s (SPE's) intellectual property and data; it was intended to and did cause physical harm to its network and operations. North Korea literally planted and detonated a bomb within SPE’s systems. The implications for businesses, brokers and insurers are significant and raise additional concerns about Congress’s failure to extend the Terrorism Risk Insurance Act of 2002.

The critical trend of data security breaches and cyber liabilities significantly harming mid cap and small businesses will continue to increase through 2015. Small companies need to recognize that they have as much, if not more, risk of suffering losses and attacks with greater frequency and severity than their bigger competitors. In fact, smaller companies are at greater risk because they do not have the same depth of resources as their larger competitors. Brokers and insurers can assist these companies in preparing for, protecting against and surviving an eventual and potentially catastrophic cyber crisis event.

As companies, brokers and insurers continue to develop a better understanding of the risks and exposures involved with data breaches, standard insurance portfolios must be reviewed and developed to provide proper protection in the face of state laws and other outside influences.

While governmental regulatory actions can have significant financial impact on the marketplace, in the instance of a governmental product advisory, a standard insurance portfolio of general liability and property policies offers no protection. Companies should consider governmental recall and adverse publicity coverages that are contained in product contamination and product recall policies to protect their bottom line.

A recent decision by the Colorado Court of Appeals may now require insurers to prove prejudice in order to deny coverage of a settlement negotiated without their knowledge or consent. However, the decision may also restrict insureds’ potential recovery of statutorily imposed double damages for unreasonable delay or denial because the court interpreted “other insurance” clauses to limit such damages.

The Rocky Mountain floods raise a host of anti–concurrent cause issues. If there is no flood coverage or the water damage is excluded, what about potential resulting damage, such as earth movement, structural damage or mold? Colorado courts, for example, have historically enforced anti–concurrent cause language, but the severity of the damages may trigger legislative action overruling such decisions. Indeed, following the Superstorm Sandy losses, New York passed legislation limiting the application of anti–concurrent cause language so as to maximize coverage. The Colorado, New Mexico and Utah state legislatures all passed legislation of some kind in reaction to the considerable forest fire losses sustained in 2012, so it is feasible these states may react in kind to the 2013 flood losses.

The Colorado Supreme Court abolished the sudden emergency doctrine defense, reasoning that abolishing this doctrine does not drastically affect the defense of cases involving sudden emergencies because the standard of care in those situations remains the same.

If an employer with an anti-drug policy fires an employee who admittedly used marijuana the night before at home, the conflict between the express rights outlined in the recently passed Amendment 64 and the prohibition on terminating someone’s employment for otherwise legal conduct may spin the conflict into protracted litigation.

As businesses and families that were caught in the path of Hurricane Sandy begin to survey the damage, insurers are feeling the first surge of many claims to come. Now’s the time to confer with Wilson Elser’s knowledgeable and adept insurance attorneys to be certain you’ve got all contingencies covered.

This is the first in a series of alerts designed to provide you with clarity and understanding of the important and significant issues raised by this unprecedented crisis.

The proliferation of social media in the workplace has increased the risk of potential liabilities for companies. Specifically, there is a growing amount of litigation arising out of the use of confidential or proprietary information shared on social media websites.

On September 22, 2011, the United States District Court for the Northern District of Illinois, Eastern Division determined that no coverage existed under an accidental product contamination policy where the products were never actually contaminated with harmful bacteria.

Wilson Elser

More than 800 attorneys strong, Wilson Elser serves clients of all sizes, across multiple industries and around the world. Wilson Elser has 37 strategically located offices in the United States and one in London. It is also a founding member of Legalign Global, a close alliance of four of the world’s leading insurance law firms, created to assist companies doing business internationally. This depth and scale has made it one of the nation’s most influential law firms, ranked in the Am Law 200 and 53rd in The National Law Journal’s NLJ 500.